Homebuying activity increased in November to the strongest sales pace in nearly a decade, though rising prices and mortgage rates could pressure the U.S. housing sector in 2017, The Wall Street Journal reports.
Purchases of previously owned homes, which account for the vast majority of U.S. sales, edged up 0.7% from October to a seasonally adjusted annual rate of 5.61 million last month, the National Association of Realtors says today. That was the third straight monthly rise, beating economists’ expectations for a modest November decline, and the strongest sales rate since February 2007.
But prices continued to rise as inventory stayed tight, crimping affordability for many would-be buyers as mortgage rates march higher. Those forces could depress sales as the spring buying season approaches.
“We do expect some tapering off of home sales in 2017,” Lawrence Yun, the Realtor group’s chief economist, tells The Wall Street Journal.
Sales in November rose 15.4% compared with the same month a year earlier. The annual gain was exaggerated by a one-off plunge in sales during November 2015 that the NAR had blamed on new federal mortgages rules delaying closings.
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